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1: Walmart.

com's History and Mission

"The secret of successful retailing is to give your customers what they want. And really, if you
think about it from your point of view as a customer, you want everything: a wide assortment of
good-quality merchandise; the lowest possible prices; guaranteed satisfaction with what you
buy; friendly, knowledgeable service; convenient hours; free parking; a pleasant shopping
experience."

- Sam Walton Founder Walmart (1918-1992

Walmart.com is a lot like your neighborhood Walmart store. they feature a great selection of
high-quality merchandise, friendly service and, of course, Every Day Low Prices. We also have
another goal: to bring you the best shopping experience on the Internet.

Founded in January 2000, Walmart.com is a subsidiary of Wal-Mart Stores, Inc. its headquarters
is on the San Francisco Peninsula near Silicon Valley, where they have access to the world's
deepest pool of Internet executive and technical talent.

Walmart Business Strategy

Walmart business strategy is based on everyday low prices philosophy of the company. In
other words, Walmart pursues cost leadership business strategy enabled by the economies of
scale derived by the company in a significant extent. An efficient utilization of online sales
channel contributes to the level of cost-efficiency of retail operations and about 75 percent of
walmart.com sales come from non-store inventory.

Constant improvements of assortment, price and access are basis of Walmart business strategy. In
simple terms, Walmart strives to offer the widest choice of products for the cheapest price, along
with giving customers the opportunity of choosing the most convenient channel to facilitate the
purchase.

Wall Mart competitive advantage relies on cost leadership. Moreover, the strategic level
management consistently aim to associate Wall Mart competitive advantage with price, access,
assortment and experience. Since his appointment as CEO in February 2014, Doug McMillion
introduced important changes in Walmart business strategy in the following three directions:
1. Increasing focus on customer services. In February 2015, the company announced a
USD1 billion investment in U.S. hourly associates to provide higher wages, more training
and increased opportunities to build a career with Walmart.
2. Improving groceries. Due to increasing level of health-consciousness of consumers,
Walmart is attempting to increase its range of organic options and fresh produce. This
change is more evident in the US market and it is being actively integrated into marketing
communication message of the brand.
3. Enhancing the flexibility of the shopping experience. It has been noted that Wal-Mart
is working to integrate its physical stores with the digital business. For example, thanks
to the latest changes, customers are able to collect their online orders from stores and they
can also get text reminders from the pharmacy.

Generally, Walmart competitive advantage can be sustained in the global marketplace in long-
term perspective. We operate for less and We Buy for Less programs saving us USD150
million in China. The company can replicate this strategy to other markets in order to gain and
sustain its cost advantage.

2: Local Business (Metro Cash & Carry)

Business Strategy of Metro Cash & Carry


At this time METRO cash and carry is concerning with the differentiation strategy. They can also
come up with the focus strategy for the retailers so that they think that METRO cares them and
conducting a major portion of business just for the retailers. It will convince and internally force
them to come to METRO just to admire its services and respect to the retailers.

Is it a differentiation strategy?
Yes because Metro is offering all most every brand under one roof, which is unique in Pakistan.

Yes in the sense that they are looking specifically at wholesalers and retailers.

Yes - as their approach to the core function is fundamentally different to the rest of the
marketplace.

Yes - as they have a key "Business Ready" report for customers before the start of the
working day.

Yes as all technical staff are employed and not contracted.


Challenges faced by Metro Cash & Carry

Less awareness in Pakistan regarding cash and carry business.

Opening of many locals stores with the same business model like Hyperstar, Punjab
Cash & Carry and Madina Cash & Carry etc are a big challenge for METRO.

Location for a big store is suitable but outside the city and not suitable for customer who
does not have much shopping time.
High inflation rate in Pakistan which is increasing the cost of products but decreasing
purchasing power of people, in such circumstances it is hard for METRO to attract more
customers.

3: Metro Cash & Carry Differentiation Strategy

Its position vis--vis Porters Five Forces

Bargaining Power of Buyer

As far as the bargaining power of METRO buyer's is concerned, METRO is not in a strong
position. They have low power against the customers because customer influence in pricing and
shifts towards other sellers if he/she is not satisfied with the quality or price of the manufactured
goods or services. Thus too maintain the balance Metro has to provide Best quality with
competitive prices alongside with customer services.

Bargaining Power of the Supplier

METRO has many options to buy products from any supplier. So suppliers try to make possible
their products at their store. So we can say that METRO has high bargaining power with
respect to the suppliers.

Threats of Substitutes

METRO has the close substitute like HyperStar in Lahore and Islamabad and other substitutes
the specialized whole sale markets are the great threat to the organization. If the customer is not
satisfied with any factor they can easily switch to the other because he/she has the almost exact
or the same kind of substitutes. Threat of substitutes is high.
Threats of New Entrants

Government is allowing certain new investors to invest in the cash and carry business. Although
initial investment for this industry is much high but for such kind of chains like WalMart and
others have no problem in that. So METRO also has a high threat of new entrants.

Many new entrants have already been set up like Punjab Cash & Carry and Madina cash &
Carry.

Rivalry among Existing Competitors

Presently, the existing competitor of METRO is only the Makro and HyperStar in the same
capacity and also the whole sale markets of every product. But the specialized whole sale market
dealers cannot run any customers' concerning marketing campaign so in this regard METRO has
to face a stiff competition with Makro. Makro is almost the same services and it is also the
foreign investment. METRO should focus on customer's satisfaction to compete the Makro.

After analyzing METRO business strategy via Porters five forces, we can conclude that Metros
advantages are not sustainable. As almost all the advantages are facing high threats either its
from substitute or Buyers or competitors.

4: A firm that has successfully achieved combination overall cost leadership and
differentiation strategy.
WALMART.

Walmarts strategic direction is based on the companys responses to the Five Forces in its
industry environment. The firm has succeeded in achieving the leading position in the retail
industry. Walmart now stands as the biggest retailer in the world. However, the external
factors in the industry environment impose pressure that must be addressed. Walmart needs to
develop strategies that address the bargaining power of buyers and suppliers.
A Five Forces analysis of external factors in the industry environment of Walmart, based on
Porters model, shows the implications of the competitive rivalry or intensity of competition,
bargaining power of buyers or customers, bargaining power of suppliers, threat of substitutes or
substitution, and the threat of new entrants. All of these factors impact Walmarts success rate.

Overview: Walmarts Five Forces Analysis

In summary, Walmart must focus on competitive rivalry and the threat of new entrants, based on
this Porters Five Forces analysis of the retail industry environment. These two external factors
have the strongest force on Walmarts business:

1. Strong competitive rivalry or competition


2. Weak bargaining power of buyers
3. Weak bargaining power of suppliers
4. Weak threat of substitutes or substitution
5. Strong threat of new entrants

Recommendations. Walmart must create new strategies that develop and sustain the companys
competitive advantage in the long term. Emphasis on competitive advantage helps address
concerns on competitive rivalry and the threat of new entrants. For example, Walmart can invest
more in automation of internal processes in its supply chain. Improving human resource
development can also boost the companys competitive advantage.

Intensity of Competitive Rivalry (Competition)

The intensity of competitive rivalry is strong in the retail industry. There are many firms of
different sizes competing in this industry environment. The following external factors are the
most significant for Walmart to consider with regard to competition:

1. Large number of firms in the retail market (strong force)


2. Large variety of retail firms (strong force)
3. High aggressiveness of retail firms (strong force)
Bargaining Power of Buyers

Walmart faces the weak intensity of the bargaining power of buyers in the retail industry
environment. Walmart must address the following external factors concerning the bargaining
power of buyers or customers:

1. Large population of buyers (strong force)


2. High diversity of buyers (weak force)
3. Small size of individual purchases (weak force)

The large population of buyers exerts a strong force on Walmart and the retail industry. However,
the weak force of buyer diversity and the weak force of small individual purchases counteract
such condition. In effect, the bargaining power of buyers is weak in influencing Walmart and
other retail firms.

Bargaining Power of Suppliers

The bargaining power of suppliers has weak intensity in the retail industry environment. There
are many suppliers in the retail industry. Large firms like Walmart can easily affect these
suppliers. Based on this condition, Walmart and other retail firms must address the following
factors contributing to the bargaining power of suppliers:

1. Large population of suppliers (strong force)


2. Tough competition among suppliers (weak force)
3. High availability of supply (weak force)

Threat of Substitutes or Substitution

The threat of substitutes or substitution has weak intensity in affecting the retail industry
environment. Walmart offers a wide variety of goods and some services that have a few or no
substitutes. The following external factors are the most significant on Walmart, concerning the
threat of substitution:

1. Considerable availability of substitutes (moderate force)


2. Low variety of substitutes (weak force)
3. Higher cost of substitutes (weak force)

Some substitutes to Walmarts goods are readily available. This is a significant consideration in
the retailers strategic planning process. However, the external factor of the low variety of
substitutes makes it difficult for consumers to move away from products available from retailers
like Walmart. Also, some substitutes are more expensive than the low-cost goods available at
Walmart stores. Thus, in the retail industry environment, the threat of substitutes or substitution
has a weak intensity/force on Walmart.

Threat of New Entrants (New Entry)

Walmart and other retailers must address the strong-intensity threat of new entrants. New entry
of retail firms is easily achieved even in the presence of giants like Walmart. Small retailers can
enter the market and compete on the basis of convenience, location, specialty, and other factors.
This force is broken down into some of its component external factors, as follows:

1. Low cost of doing business (strong force)


2. Moderate capital costs (strong force)
3. Moderate cost of brand development (moderate force)

References:
1. Walmart Business Strategy and Competitive Advantage

Posted on March 28, 2016 by John Dudovskiy

2. Strategic Marketing Plan of Metro Cash And Carry

Published in UKessays: 23rd March, 2015

3. Wal-Mart Stores, Inc. (2014). Walmart CEO Outlines Growth Strategy


at Annual Meeting for the Investment Community.

4. Walmart: Five Forces Analysis (Porters Model)

Posted on Jan 8, 2017. By Roberta Greenspan.

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